Tuesday, January 30, 2018

The retail apocalypse has claimed many malls across America, but some of the best in the country have continued to thrive. Located in Honolulu, Hawaii, the Ala Moana Shopping Center was recently named the most valuable mall in America.

With over 350 stores and restaurants ranging from budget-friendly chains to high-end boutiques and department stores, the Ala Moana Center is worth roughly $5.74 billion, with about $1,500 in sales per square foot, according to a recent study by the research firm Boenning & Scattergood, which was reported on by CNBC. . . . more

The numbers for 2017 are in: It appears the holiday
shopping season was a success. But will this translate to a revival for
bricks-and-mortar retail in 2018?

The short answer is that it depends. That was the message during real
estate services firm Cushman & Wakefield’s recent webinar on the
topic, hosted by Garrick Brown, head of retail research for the
Americas, and Ben Conwell, senior managing director and e-commerce
advisory group lead.. . . more

Amazon is teaming up with two influential companies to try to improve
a system that others have tried and failed to change over the years.

Amazon, Berkshire Hathaway and JPMorgan Chase will form an
independent company, as yet unnamed, that will address health care for
the U.S. employees of their respective companies with the aim of
lowering costs and improving satisfaction — outside a focus on profit
making and other constraints.. . . more

Payless ShoeSource is realigning its North American retail
organizational structure, with an end goal of better serving the
customer.

The footwear retailer announced that is increasing the number of
North America associates who work closer to the store level while
reducing layers between its corporate headquarters and retail stores. It
did not specify if the realignment will result in the elimination of
jobs.. . . more

The majority of shoppers could be buying their groceries online within five years, much sooner than previously thought.

A joint report from the Food Marketing Institute
and Nielsen predicts 70 percent of consumers will be buying at least a
portion of their groceries online in the next five to seven years, CNBC reported. Both groups had previously estimated the shift would take place over 10 years.

Shoppers are still expected to spend 80 percent of
their grocery dollars in stores, as they tend to be loyal to their
grocers, per CNBC.. . . more

Monday, January 29, 2018

Online retail sales grew by 12.1% year on year in 2017, according to the annual IMRG Capgemini e-Retail Sales Index. But although sales grew over the year, annual online retail sales were 2% below the forecast growth rate of 14% – and were below the previous year’s 15.9% online retail sales growth rate.

Justin Opie, managing director of IMRG, said several macro-economic factors, such as rising inflation and interest rates, may have contributed to the slow growth, and that retailers should expect 2018 to be even harder. . . . more

Jeff Bezos’ e-commerce giant invited Boxed founder and Chief
Executive Chief Huang to Amazon’s Seattle headquarters on Wednesday to
discuss an acquisition of the four-year-old company, a source with
knowledge of the trip and discussions told The Post.
It is the first time Huang has met with the Seattle behemoth and comes on the heels of reports that Boxed — which sells bulk grocery goods — is an acquisition target of Kroger, the country’s largest grocery chain.. . . more

Mattress Firm’s president and CEO Ken Murphy is stepping down after two
years on the job. He will be succeeded by Steve Stagner, executive
chairman, effective March 1. Stagner, who has been with Mattress Firm
for more than 20 years, previously served as CEO from February 2010 to
March 2016, handing over the reins to Murphy.

Stagner returns to the CEO role at a turbulent time in the company. In
September 2016, Mattress Firm was acquired by South African conglomerate
Steinhoff International Holdings in a $3.8 billion deal that included
Steinhoff assuming more than $1 billion in debt the U.S. retailer had
racked up in an expansion move that saw it acquire several major
competitors. Last December, Steinhoff’s president and chairman resigned
following the discovery of what the company described as “accounting
irregularities.”. . . more

Dollar General will hold its first-ever Innovation and Supplier
Diversity Summit in April. The event is designed to pair potential
vendors with respective buyers and category managers from the chain. It
is open to new suppliers and also those who have not sold products to
the company within the past 18 months.

In addition, in order to be eligible to attend, suppliers must sell items in at least one of the following categories:

This month, the
Wal-Mart Stores Inc. chain closed 63 U.S. Sam’s Club locations. The closures cut about 10,000 jobs and are the largest since Wal-Mart founder
Sam Walton
opened the first Sam’s Club in 1983. Wal-Mart says some of those workers will get jobs in other stores.

The closures aren’t only a result of retail’s rapid shift
online, but are part of a strategy pivot by new Sam’s Club Chief
Executive
John Furner
to turn what has long been Wal-Mart’s underperforming sibling
into a retailer that can rival its most successful competitor,
Costco
Wholesale Corp.. . . more

Staples Inc. is bringing on an outgoing Coca-Cola Co. executive to serve as its next chief executive, the company said Friday, the same day that CEO Shira Goodman left the company.

J.
Alexander “Sandy” Douglas Jr., most recently the president of Coca-Cola
North America, will become Staples CEO on April 2, according to a
statement from Staples. Coca-Cola had announced in October that Douglas
would be retiring from the Atlanta-based beverage giant on March 1. He
has spent the past 30 years of his career at Coke.. . . more

Friday, January 26, 2018

Recent estimates suggest that convenience stores will achieve total
sales of about $73 billion in 2018—on the lower end of the spectrum for
this sub-sector—and total sales growth of just 5.5 percent, according to
the “Retail, Apparel and Restaurants—U.S., 2018 Outlook,” from Moody’s
Investors Service.. . . more

A survey by Morning Consult ranks the companies, brands, and
organizations that are the most politically divisive—or the ones that
divide Democrats and Republicans the most. And at the top of the list is
Trump Hotels.

Media companies dominate the top 30. But five retail/restaurant
companies also are included: Chick-fil-A (#15), Bass Pro Shops and Papa
John’s (tied at #21), Starbucks (#25), and Cabela’s (#26).. . . more

The coffee chain posted disappointing sales growth in all its major
regions on Thursday, signaling that it now has bigger problems than an
overly saturated U.S. market.
“Our
holiday merchandise and limited-time offers did not perform up to
expectations,” Chief Executive Officer Kevin Johnson said in an
interview. In the U.S., the chain also saw “a little bit of softness in
the afternoon, which may be a reflection of fewer people out shopping.”. . . more

Wal-Mart Stores Inc.
is cutting as many as 1,000 jobs at its headquarters this year and
next, the latest effort to streamline a retail empire under threat from Amazon.com Inc.

The
first wave of layoffs totaled between 400 and 500 jobs and hit the
company’s marketing, human resources, merchandising, real estate and
other divisions this week, the Bentonville, Arkansas-based chain said.
Those affected will have 60 days to find a new role.. . . more

Thursday, January 25, 2018

Amazon has increased its third-party seller fees and apparel is now the most expensive item to sell on the site, Business Insider reported.

The company raised the fee for sellers in the
Clothing and Accessories category from 15 percent of the sale to 17
percent, and the fee for handbags and sunglasses jumped from 15 percent
to 18 percent for items above $75, according to Business Insider.

Amazon also altered fees for jewelry sellers,
charging 20 percent on the first $250 per item, and 5 percent on the
rest. The move could be a strategy to bring more higher-priced luxury
jewelry to the site, per Business Insider.. . . more

Supermarket Co. and New England Development have revealed more
details and preliminary renderings for Allston Yards — their proposed
10.6-acre, mixed-use development with up to 1,050 housing units, office
space, a new flagship store for the grocery chain and other retail,
restaurant and fitness uses.

The four-building project would be
built in phases over several years at the Everett Street site of the
current Allston Stop & Shop, located near the Mass Pike and next to
New Balance’s 15-acre Boston Landing complex and the MBTA’s Boston
Landing commuter rail stop.. . . more

Target Corp. is moving quickly to leverage its $550 million acquisition of Shipt.

The discounter announced that it will debut same-day delivery
services via Shipt on Feb. 1 across 57 stores in South Florida and
Birmingam, Alabama. It will move quickly to expand the service, making
it available at nearly half its 1,834 stores by the end of the first
quarter (February 12), and the majority of its stores in time for the
2018 holiday season.. . . more

Walmart filed a patent for an online grocery shopping
service that functions like the dating app Tinder. Called ‘The Fresh
Online Experience (FOE) system,’ the solution will allow customers to
view the exact item that in-store associates are picking to fulfill
their online grocery order.

The item will be scanned using three-dimensional scanning. As the
associate packs the order, they scan images of the items. Upon receiving
a notification of the merchandise, shoppers can approve or reject the
fresh item before it is packed into the order, according to the patent
filing.. . . more

Rite Aid’s transfer of stores to Walgreens Boots Alliance is expected to be complete in spring of this year.

Rite Aid reported the successful transfer of 625 of its stores and
related assets to Walgreens Boots Alliance. The company said it has
received cash proceeds of $1.3 billion, which it is using to repay all
of its $970 million of outstanding secured loans while maintaining a
strong liquidity position.. . . more

Wednesday, January 24, 2018

The future for many industry names is bright and booming, despite dire headlines. And malls and shopping centers are taking on a new image of their own, bringing in experiential tenants and living spaces as department stores and other big-box anchors scale back.. . . more

Nine West Holdings Inc. and its creditors are closing in on a deal to restructure almost $1.5 billion of debt that would include filing for bankruptcy and selling off parts of the shoe and clothing retailer, according to people with knowledge of the negotiations.
The plan hinges on asset sales to pay off creditors, according to the people, who asked not to be identified because the negotiations are private. Nine West would seek Chapter 11 court protection with a restructuring plan agreed upon in advance by its creditors, said the people. The goal is to file before a March 15 interest payment, they said.. . . more

Ontario Teachers’ Pension Plan Board has held talks
with other investors about a potential deal to take U.S. mall owner
Macerich Co. private, according to people familiar with the matter.

The Canadian pension fund, which owns about 16.5 percent of real
estate investment trust Macerich, has held discussions with firms
including sovereign wealth funds about backing the potential bid, the
people said, asking not to be identified as the details aren’t public.
Talks are at an early stage and may not lead to a deal, the people said.. . . more

Fitch Ratings downgraded Sears Holdings Corp.’s ratings to C from CC, after the retailer announced a distressed debt exchange.

Sears said it has commenced an exchange various tranches of debt held
by Sears and its Kmart business, Marketwatch reported. The exchange
involves pay-in-kind notes that allow the company to make interest
payments with more debt.. . . more

A proposed 115-unit Brighton apartment building with discounted
first-floor space to support a local business is under city review.

Boston-based
KIG Real Estate Advisors wants to land the five-story structure with
studio to three-bedroom apartments at 5 Washington St., across from a
Whole Foods Market, according to an expanded project notification form
filed with the Boston Planning & Development Agency. Fifteen of the
apartments would be affordable units restricted to households making 70
percent of the area median income or below.. . . more

Toys R Us is planning to shutter roughly 180 stores across the country, or about one-fifth of its U.S. store fleet, in a bid to restructure the company and emerge from bankruptcy protection.

The closures still need court approval, documents show, but management is planning to shut those locations beginning in early February and running through mid-April. (See below for a complete list of those locations set to close.). . . more

Seeking a new way to transport retail from bankrupt to burgeoning, landlords are looking to transit hubs as a way to drive traffic.

This is in opposition to the former strategies employed by mall landlords, who used to attract shoppers with popular anchor stores and then limit the number of exits in order to encourage lengthier periods of shopping and spending, the Wall Street Journal reports.. . . more

It didn't come right out and say it, but JPMorgan Chase & Co. gave strong indications Tuesday it may soon open its first retail branches in Boston.

Chase retail expansion plans are ambitious — up to 400 new branches in the next five years, in an era when most banks are shrinking their brick-and-mortar footprints. In its statement announcing the plans, Chase stopped short of definitively saying where it will expand, but Boston was one of the few cities it name-checked.. . . more

Boston-area Whole Foods customer complaints have surged in recent weeks due to food shortages and empty shelves. The logistical problems predate Amazon acquiring the company and are part of the reason why the grocer was for sale in the first place, the Boston Globe reports.

“Amazon does not understand the details involved in fresh food retail,” Strategic Resource Group retail analyst Burt Flickinger told the Globe. “This is going to be Amazon’s retail version of Vietnam; it’s going to take three to five years to fix and at a really, really high cost.” . . . more

Tuesday, January 23, 2018

After a strong holiday shopping season, plus the
passage of a tax reform bill expected to boost personal spending,
industry experts are looking forward to an improved environment in the
retail real estate sector in 2018.

Mixed-use centers are expected to be among the better-performing
assets in the sector, as the industry moves away from shopping centers
and enclosed malls and to properties that combine office, hotel and retail elements.. . . more

Skandia’s actively managed funds have spent the past months selling
off most of its stake in Hennes & Mauritz AB after watching the
fashion retailer struggle with weakening sales in its physical stores
and intensifying online competition. The Swedish savings and insurance
giant says there’s a raft of issues H&M would need to address before
it will consider investing again.. . . more

More spending power and domesticated lifestyles among Amazon’s shoppers sparked growth among consumables in 2017.

Described as its biggest breadwinner, Amazon’s consumables category
racked up an estimated $6.2 billion in sales in the United States in
2017 — a 41% increase over 2016. This puts the category second to only
consumer electronics, according to “Amazon Consumables 2017 Review,”
from One Click Retail, a company that specializes in e-commerce data
measurement, sales analytics and search optimization for brand
manufacturers.. . . more

Foot Locker is investing in an online women’s luxury fitness and fashion brand with a cult following.

The athletic retailer announced that it has made a strategic
investment in Carbon38, taking a minority stake in the brand. The $15
million Series A funding round brings the total raised by Carbon38 to
$26 million since 2013.. . . more

Tween accessories company Claire's,
the go-to destination for ear piercing, has hired investment bank
Lazard to help address its roughly $2.2 billion debt load, the company
announced on Monday.

"We believe this is the right time to
undertake this initiative and we want to assure our vendors, employees
and stakeholders that we believe we have ample liquidity to honor our
commitments through the completion of this process," said CEO Ron
Marshall.. . . more

Dallas News
Kroger has stepped up closings of unprofitable stores including one
that had been open for less than two years in Plano. At the same time,
Kroger is still opening new stores and investing in new technology. It's
bringing Scan, Bag, Go self-checkout system to 19 North Texas stores
beginning in March.

Kroger is adding the Scan, Bag, Go system to 400
stores nationwide and the 19 in North Texas will have them installed
from March through August, said April Martin Nickels, Kroger spokeswoman
in North Texas. Shoppers have to have a Kroger Plus card to use it, she
said, and the purchase is completed at the self-checkout. (Last summer,
Walmart brought its version of scan-as-you-shop system to several local stores.). . . more

Monday, January 22, 2018

Retail REITs have been punished in spite of the fact that they tend to own higher-quality assets, while it’s lower-quality malls and shopping centers that tend to be hit hardest by challenges like e-commerce, Brad Case, senior vice president of research and industry information with NAREIT says.

“I think regional malls and shopping centers are due for a good year this year,” says Matt Werner, managing director and portfolio manager at Houston-based investment advisory firm Chilton Capital Management LLC, citing the potential for stepped-up mergers and acquisitions activity. By and large, REIT stocks are undervalued, Case says, and stock prices are lower than they should be based on the strength of the industry.. . . more

Traditional malls need to transform themselves to stay alive, and many are making changes to attract more business.

Malls of the future have an opportunity to fulfill other community needs besides commerce, June Williamson, an architecture professor at the City College of New York and an author of "Retrofitting Suburbia," told Business Insider.

The retail side of the golf industry has changed significantly in recent years and no company in the game has adjusted and evolved more successfully than PGA TOUR Superstore.

Mirroring the approach that helped Home Depot change the home improvement sector, the retailer is coming off a record year in which it had 23 percent sales growth, opened several new stores, conducted over 100,000 custom club fittings, gave about 50,000 lessons and re-gripped more than 750,000 clubs.. . . more

The message was clear at the National Retail Federation’s annual “Big
Show in New York: Retailers need to adopt disruptive technology if they
want to remain relevant among digitally savvy shoppers.

With customers in the driver’s seat, retailers find themselves in the
hot seat not only to keep these consumers engaged, but to streamline
the shopping experience. The only way to do so is to adopt innova-tive
technologies that can meet — and exceed — customer expecta-tions and
remove friction from their shopping journeys.

CB2, described as the younger, hipper sibling of Crate & Barrel,
announced earlier this week a Feb. 2 opening of a 12,000-square-foot
showroom in the space formerly occupied by Kenneth Cole, Lacoste, and a
physical therapy office at 1422 Walnut St.

The Philadelphia location marks its 12th store in the country
and fifth East Coast location. CB2, which has been on an expansion run,
opened a location in Paramus, N.J., in August.. . . more

Last October, Kohl's started selling Amazon's smart home products and accepting the online retailer's returns at a handful of its U.S. stores. Since then, some people have made the case for Amazon outright acquiring Kohl's for its real estate and loyal customer base.

The partnership between the two
is a "win for both companies," Konik said Friday. "We anticipate the
pilot to roll out nationally and provide Kohl's stores with stronger
traffic and is a nice added convenience for Amazon shoppers.". . . more

Friday, January 19, 2018

Travel retail sales are poised to exceed $1 billion with five years amid surging growth in fragrances and beauty.

The global travel retail market, valued at $69.5 billion in 2016, is
projected to reach $125.1 billion by 2023, growing at a compound annual
growth rate of 8.9%, according to a report by Allied Market. The largest
segment of the market is perfumes and cosmetics, which enjoys a strong
customer base.. . . more

That’s according to a survey by CPC Strategy in which 52.1% of online
shoppers said they bought clothing from Amazon in the last six months,
while 46.7% cited a retailer’s website. Nearly 14% (13.9%) said eBay,
and 10. 8% said search engines. (All respondents were screened with the
question “Have you ever purchased clothing online?” and only those who
responded “yes” participated.)

Other key takeaways from the “U.S. Apparel Shopping Trends Forecast:
How Shoppers Will Browse and Buy Clothing in 2018” report include:. . . more

Amazon Prime memberships are getting more expensive — for
those customers who want the flexibility to pay for the speedy shipping
and media streaming program on a monthly basis.

The company is announcing on Friday that the Amazon Prime
monthly fee is increasing from $10.99 to $12.99 in the U.S., an
increase of 18 percent. The new price works out to nearly $156 a year.. . . more

Starbucks
will open a dedicated mobile order and pay store next week in its
Seattle headquarters building as it tests how to best serve
convenience-oriented customers, the company said in a letter to
employees on Thursday.

The coffee chain has been looking for ways to ease
bottlenecks at cafe drink delivery stations, which suffered peak-hour
backups due to a pileup of mobile drink orders.. . . more

The recent Christmas 2017 sales report for J.C. Penney implies that
improved sales should be a balm for optimists. Hard times are looming for
the company.

Very high debt. The company has about $7.5 billion
in total debt if you take total liabilities minus cash minus
receivables. J.C.Penney calculates outstanding long-term debt to be
about $4.06 Billions.
. . . more

Internet retailers and other merchants new to the physical space tend to get bewildered by the length of the modern lease process. In a session at ICSC’s New York Deal Making last December, Kyle Ashley, director of retail innovation for eyewear vendor Warby Parker, urged landlords to make the process quicker, easier and more transparent. “Why does it take five months to negotiate a lease?” Ashley asked.

One of the surest ways to speed the process is to use in-house leasing personnel, says Gerald Crump, a Weingarten Realty senior vice president who oversees the central region. “This gives us the ability to make quick decisions and coordinate immediately with our legal group, all of which takes time off the lease-negotiation process.”. . . more

Thursday, January 18, 2018

Simon Property Group and Starbucks Corp. have reached a settlement over a lawsuit by the mall owner that had sought to prevent Starbucks from closing Teavana stores in its shopping centers.

In November, an Indiana judge ordered the coffee giant to halt from closing Teavana stores in 77 retail locations owned by Simon. Starbucks filed an appeal against the preliminary injunction.. . . more

Not so long ago, retail was all about offering the right products at the right price at the right time. But in today’s integrated consumer-driven marketplace that’s no longer enough. Now it’s about persuading customers to buy into your brand by showing them who you are, what you stand for and why you exist.

In short, it’s about going back to your roots and offering a clear and renewed sense of purpose.. . . more

The developer proposing to build a 700,000-square-foot retail, dining and entertainment complex on Route 300 in the Town of Newburgh officially announced it is abandoning the project, two months after the Newburgh school board rejected a 20-year tax-break deal.

Needham, Mass.-based Waterstone Properties said Wednesday in a press release that it is considering non-retail uses for the 122-acre property, which sits across from the Newburgh Mall where Route 300 intersects with Interstate 84.

Named The Ridge Hudson Valley, the project was to include an 85,000-square-foot BJ’s Wholesale Club, a 50,000-square-foot Dick’s Sporting Goods and a 78,000- square-foot ShopRite, which would have relocated from North Plank Road.. . . more

As Burlington Stores prepares to open a new outlet in Somerville, the national retail chain is holding a two-day community jobs fair for area residents interested in applying for the 75 positions that will be available at the facility.

Set to open this spring, the 45,000-square-foot store will be located at 133 Middlesex Ave., near the Assembly Row development. Formerly known as Burlington Coat Factory, Burlington has 632 stores in 45 states and Puerto Rico.. . . more

Whole Foods is facing a crush of food shortages in stores that's
leading to empty shelves, furious customers, and frustrated
employees.

Many customers are blaming Amazon,
which bought Whole Foods in August for $13.7 billion. Analysts
have speculated that the shortages could be due to a
spike in shopper traffic in the wake of the acquisition.

But Whole Foods employees say the problems began before the
acquisition. They blame the shortages on a buying system called
order-to-shelf that Whole Foods implemented across its stores
early last year.. . . more

Amazon has quietly launched a new feature
that’s seemingly aimed at helping the retailer better compete with
discount shopping apps such as Wish and others. In the Amazon iOS app and on the web,
Amazon recently added a new section offering products under $10 that
ship for free. Some of the products are also available on Prime, but the
feature doesn’t appear to be limited to Prime subscribers.

Called “$10 & Under,” the selection can be found under “All
Programs” in the Amazon’s app main navigation. This is the area where
Amazon regularly trials its newer experiments, like its shoppable Instagram clone Spark or outfit compare feature, for example.. . . more

Wednesday, January 17, 2018

Crunch Fitness Franchise announced today that its Connecticut-based
franchisee, Fitness Holdings LLC, has acquired Boost Fitness, the
largest independent fitness chain in Central Massachusetts. The
acquisition increases the number of Crunch locations in Massachusetts
five-fold, growing the club base from two clubs to ten in the Boston
area.
The eight Boost fitness centers, located in Auburn, Oxford,
Fitchburg, Franklin, Hudson, Tewksbury, Westford and Worcester, were
converted to Crunch Fitness clubs and began operating under the Crunch
brand on January 1, 2018.. . . more

Kiko USA, the U.S. subsidiary of an Italian makeup retailer, filed for Chapter 11 bankruptcy last week with plans to close all but five of its domestic retail locations.

The retailer wants to close 24 of its 29 domestic locations in bankruptcy. This, together with a 25th closure, could reduce annual operating losses by $7.1 million a year, and leave $3.9 million in real estate costs going forward, according to Kiko USA CEO Frank Furlan. He added that the retailer hopes to be completely moved out of those locations by Feb. 28.. . . more

Wegmans Food Markets officials said the company plans to open its new store at Natick Mall on April 29.

Wegmans is moving
into the former JCPenney space. The company is creating a two-floor,
146,500-square-foot supermarket that includes more than 100 seats for
in-store café dining and two restaurants. The store will feature
escalators for shoppers and carts as well as elevators to help customers
move between the floors.. . . more

Retail industry sales are expected to remain on the upswing for the next several years and so are store openings.

A new report by Zebra Technologies, conducted with IHL Group,
projects that retail industry sales in North America and EMEA regions
(Europe, the Middle East and Africa) will rise 3% annually through 2021,
led by a shift to greater e-commerce/omnichannel sales volume.

The year 2017 saw more retail store openings than closures and store
openings are expected to outpace closures through 2021, according to
Zebra’s 2017 Retail Transformation Study. . . . more

This isn't your father's Dunkin'
Donuts. The Canton-based company's first next-generation store in the
country — simply called Dunkin' — opened today in Quincy.

According to Dunkin' executive Dave Hoffmann
in an interview with the Business Journal, the new 2,200-square-foot
location uses the latest technology in an attempt to attract on-the-go
millennials. For instance, the store has a separate drive-through for
those customers who use the Dunkin' app to order and pick-up their food.
The chain, which opened its very first store in Quincy 68 years ago,
says its the first national restaurant brand to offer this type of
drive-through innovation.. . . more

Rent the Runway is shifting its stores' strategy to focus on
subscribers to its monthly Unlimited program, and technology is playing a
big role.

The company is transforming its stores from showrooms
for rental items to locations where Unlimited subscribers can return
and pick up clothing using self-service tablets, Glossy reported. Rent the Runway has partnered with technology company Aila on the changes.. . . more

Chain Store Age
In a decision cheered by traditional retailers and many states, the
U.S. Supreme Court agreed to revisit a 1992 decision in which it ruled
that states could only require remote sellers to collect sales taxes if
they had a physical presence in the state.

The Court said it would hear an appeal from South Dakota (South
Dakota vs. Wayfair) that the current “physical presence” rule is
outdated and unfair in a time when Americans do much of their shopping
online. In 2016, South Dakota passed a law requiring out-of-state
sellers to collect and turn over sales tax to the state. The state’s
highest court struck down the law, citing previous Supreme Court
decisions.. . . more

Boston Business Journal
The Sam's Club in Worcester — the last
Sam's Club in the Bay State — will close to the public on Jan. 26,
according to a company spokeswoman. A state filing on Thursday further
confirmed the company will lay off all of its 167 workers at the store
by March 16.

Walmart announced on
Thursday that it would close 63 Sam's Club stores across the country.
But its initial list of stores didn't contain any Massachusetts
locations, including the Worcester one at at 1 Tobias Boland Way.. . . more

Boston Herald
Dunkin’ Donuts will unveil its next generation concept store next week in Quincy — the city where its first restaurant opened 68 years ago.

The restaurant says the event at its 588 Washington St. location will offer “the first look at the brand’s U.S. store of the future.” New elements include an exclusive On-the-Go drive-thru lane for mobile ordering, a cold beverage tap system and new uniforms designed in partnership with Life is Good.. . . more

Friday, January 12, 2018

Women's apparel retailer A'gaci filed for Chapter 11 bankruptcy protection this week after a rapid brick-and-mortar expansion in recent years "spread the organization too thin to effectively respond to the rapidly changing trends in the retail market," the company's chief financial officer said in a court filing.

After building out 21 new stores over the past two years, A'gaci is now looking to close 49 stores — almost 65% of its footprint — in bankruptcy, A'gaci CFO Mark Butterbach said in the filing. Along with the overexpansion, Butterbach said the consumer shift toward online shopping, trouble implementing a new business software system, and major hurricanes last year — which "ravaged" some of the retailer's most profitable stores — forced the company into bankruptcy.. . . more

Kohl's plans to partner with retailers like grocery stores or convenience stores to lease the white space left by the roughly 300 stores it has "right-sized" over the past several years, CEO Kevin Mansell told CNBC at ICR's conference this week.

The department store has created operationally smaller, more profitable stores within its roughly 87,000-square-foot boxes. That downsizing leaves unused footage, which Mansell said would benefit from traffic-generating retailers like those that sell food.. . . more

There’s been a lot of talk of a coming retail apocalypse. In fact, many department store chains are drastically retracting their brick-and-mortar presence as online shopping takes a larger and larger slice of the overall retail pie.

But then there’s Boscov’s.

The Berks County department store chain this week announced it will open its second New England location later this year at the Connecticut Post Mall in Milford, Conn. . . . more

U.S. retail sales increased in December as households bought a range of goods and figures for the prior month were revised higher, suggesting the economy exited 2017 with strong momentum.

The Commerce Department said on Friday that retail sales rose 0.4 percent last month. Data for November was revised to show sales gaining 0.9 percent instead of the previously reported 0.8 percent increase.

Grocery chains will soon have a new way to get fresh produce into the hands of its time-starved shoppers.

Startup Robomart introduced a self-driving, nearly fully autonomous
grocery store on wheels. The rolling robot is designed to bring fruits,
vegetables, and other perishable items from the supermarket aisle to
customers’ doors, according to Business Insider.. . . more

Forever 21 has come out of the gate fast with its new
beauty/lifestyle format, Riley Rose, which made its debut in September.
The fast-fashion giant has opened the concept in eight locations to
date, including one in December at Bridgewater Commons Bridgewater, New
Jersey.

Riley Rose is targeted at young millennials. Awash in pink hues and
feminine accents, the 5,000-sq.-ft. Bridgewater store combines an
extensive and diverse mix of edgy beauty and skin care brands (including
many formerly online only and a large selection of Korean offerings)
with fun, offbeat home and lifestyle goods, ranging from stationery to
tech accessories to candy (with sweet treats from Dylan’s Candy Bar).. . . more

President Trump’s concern about Amazon’s and its impact on the U.S. Postal Service isn’t waning.

The president once again stated that there should be an Internet tax.
Without it, he said he believes that traditional retailers will
continue to struggle at the hands of online retailers, reported CNBC.

He also reiterated concerns about Amazon’s effect on the U.S. Postal
Service, as the department struggles to keep up with online orders. He
made a similar comment via Twitter in December.. . . more

It's an ambitious goal for any retailer in this climate. And it might seem especially bold for Dunkin', which said this summer it is drastically slowing expansion plans.

But
scaling down while refining a new concept and then ramping up was
always the brand's plan, said R.J. Hottovy, an analyst who covers the
brand for Morningstar. Over the summer, Dunkin' said it would pare down
its menu at some locations, remodel stores, bring in new equipment and
sell more food in supermarkets and other non-Dunkin' locations.. . . more

North American retailers expect a 6.2% increase in sales in 2018,
according to research from IHL Group. The report found that retailers
are increasing the number of stores in 2018 by an average of 5.6%, with
planned remodel of stores expected to rise more than 5%.

IT spend is also up. Store level IT Investment is expected to rise 5.8% this year over 2017 levels.. . . more

The arrival of German discount grocer into the United States is prompting rivals in its operating markets to lower their prices.

That’s according to a study by the University of North Carolina
Kenan-Flagler Business School, which examined the competitive price
effect of Lidl’s entry in the U.S. grocery market and the reaction of
Aldi, Food Lion, Kroger, Publix and Walmart. The study, which was
conducted independently, was commissioned by Lidl U.S.. . . more

Generation X continues to struggle with
debt while Millennials and Baby Boomers are making positive strides,
according to a new report.

Experian’s
State of Credit report paints a relatively healthy picture for
Americans, with the average credit score rising from 673 to 675 over the
12 months ending last June, the highest since 679 in 2007, before the
Great Recession began. Consumer confidence is up sharply and the Federal
Reserve said this week that credit card debt hit a new record in
November. That’s a good sign for consumer spending but could
spell trouble down the road if the economy and labor market weaken.. . . more

Just as Supervalu Inc. was
starting to gain some traction in its quarterly results, the company
revealed in its latest results Wednesday that the new tax law will hurt
its bottom line for the rest of its fiscal year.

Supervalu,
based in Eden Prairie, said it will take a charge of up to $45 million
in the last three months of its fiscal year, which ends in early March,
to account for reducing the carrying value of deferred tax assets as a
result of the new tax law.. . . more

Even before the early 2018 store closings and retail
bankruptcies can be tallied up, the real estate industry it taking a
look at the availability of financing capital for retail centers.

As could be expected, the flow of liquidity will be tempered and
reserved to the most desirable property sub-types and geographical
markets, with landlords likely to face a more challenging environment
for raising capital in 2018. Traditional sources of financing, such as
loans from commercial banks, will be more difficult to obtain, industry
insiders say, for reasons ranging from property-level fundamentals to
the full implementation of risk-retention rules for banks.. . . more

Sears will close 103 of its remaining 1,100 stores, putting an estimated $302.5M worth of commercial mortgage-backed securities at risk.

The stores slated to close in the spring include 64 Kmart and 39 Sears locations, 16 of which are located at retail centers backed by CMBS loans worth a total $671.1M, according to a Morningstar Credit Ratings report.. . . more

Wednesday, January 10, 2018

“When companies are priced for death, slight increases seem heroic,” observes Simeon Siegel of Nomura Securities. Indeed, holiday sales, reported over the last week by a cluster of such doomed retailers, suggest an extraordinary revival.

It isn’t surprising that Kohl’s and Target were among the best performers. Both have made big investments in e-commerce and innovation. Kohl’s attributed its growth to digital demand and stronger in-store traffic. Its new partnership with Amazon, which allows it to sell Amazon’s popular smart-home products in stores, likely helped. . . . more

Piper Jaffray's survey of 1,000 U.S. internet users revealed that 50 percent of people allocated 10 percent or less of their holiday spending to Amazon. As a result, he estimated that the company had 4 percent market share of U.S. retail holiday spending in 2017.. . . more

Walmart wants even more of its in-store shoppers to skip the checkout line.

The company is expanding the test of its Scan & Go mobile app to
another 100 stores. Currently, the app is being tested in a few select
markets, including Dallas-Fort Worth, Orlando, and Northwest Arkansas.
By adding these new locations to the mix, the app will be available in
stores operating in 33 states across the United States, according to a blog on the company’s website.. . . more

Nordstrom Inc., after a year of sluggish sales and a failed plan to
take the company private, eked out modest growth during the holiday
season.

Same-store sales — a key measure — climbed 1.2 percent in November
and December combined, the company said on Tuesday. Though that marked a
rebound from the 0.9 percent decline in the previous quarter, investors
are still waiting for a more dramatic comeback. . . . more

Sears has secured more financing, and is eying more cost cutting, as
the beleaguered retailer reported a sales drop during the critical
holiday season.

The company, which operates Sears and Kmart
stores, said Wednesday that it secured $100 million in new financing,
will seek twice that from other sources, and will attempt $200 million
in additional cost cuts this year unrelated to store closings. It also
said that if the company's efforts to complete these transactions are
not fully successful, then the board will consider all other options to
maximize the value of its assets.. . . more

A longtime Harvard Square specialty food store appears ready to cross the Charles River and open a Boston location.

Cardullo’s
Gourmet Shoppe, in business since 1950, is seeking an all-alcohol
package store license for 101 Seaport Blvd. on the South Boston
waterfront, according to a legal notice. A Boston Licensing Board
hearing is scheduled for next Wednesday.. . . more

Under the ownership of Amazon, Whole Foods Market is changing the way
some products are sold in its stores — and asking vendors to help pay
for them.

The changes, outlined in an email sent to the grocer’s suppliers, are
intended to save on costs and centralize operations, reported the Washington Post, and come as Amazon pushes to reduce prices at Whole Foods’ stores.. . . more

Toyota unveiled a concept vehicle called
e-Palette, which could host a mobile store, act as a ride-sharing
service or deliver packages. The announcement was unveiled at
International CES in Las Vegas on Monday.

The automaker said it is teaming up with a handful of partners,
including Pizza Hut, Amazon, Chinese ridesharing giant Didi and Uber.

"Today, you have to travel to the stores," Toyota president Akio Toyoda
said at the event. "In the future with e-Pallete, the store will come
to you.". . . more

While some brick-and-mortars fight to survive he increasingly
competitive retail market, one expert tells FOX Business, J.C. Penney could survive the downturn while putting Sears out of business.

“[J.C. Penney will be the] best Rocky Balboa come back in retail
and it’s by pushing Sears closer to the cliff and going to the edge of
Niagara Falls to break in the rocks in the barrel below,” Strategic
Resource Group managing director Burt Flickinger told FOX Business’
Stuart Varney on “Varney & Co.”. . . more

Amazon.com Inc. accounted for 44% of U.S. e-commerce sales in 2017, according to a new estimate by retail analytics firm One Click Retail.

Globally, Internet Retailer estimates that consumers spent $310.0 billion on Amazon in 2017. One Click Retail does not have a 2016 estimate of Amazon’s share of U.S. e-commerce sales. Slice Intelligence, however, estimated last year that Amazon accounted for 43% of all U.S. online retail purchases in 2016, just a percentage point lower than 2017. Internet Retailer estimates that Amazon accounted for 30.7% of U.S. sales out of the Top 1000 online merchants, according to Top500Guide.com. . . . more

Monday, January 8, 2018

The $13.7 billion Whole Foods deal in 2017 provided Amazon with a real estate portfolio and access to a leading consumable – food – to further strengthen its subscription pantry delivery service. Soon after taking ownership of Whole Foods, Amazon announced sizeable price cuts, some Whole Foods stores began selling Amazon technology, and the Whole Foods’ loyalty program was replaced with Amazon Prime.

Its growth strategy already underway there, is Amazon scoping out another retail to join the fold?. . . more

The damage inflicted on America’s malls by the rise of e-commerce may be worse than it appears.

As embattled retailers announce store closures at a record pace, some
tenants are shrinking their footprints more quietly by choosing not to
renew expiring leases, according to a report from property-research firm
Green Street Advisors LLC. Of 2,468 in-line stores that closed in 2017
-- a category that excludes department stores -- 979 weren’t announced,
the report produced by the firm’s advisory and consulting group shows.. . . more

Geoffroy van Raemdonck has spent his career at global fashion companies such as Ralph Lauren Corp. and Louis Vuitton.

But it will take more than an eye for style to fix the problems at
Neiman Marcus Group Ltd., a quintessentially American luxury
department-store chain hoping to relive its former glory. Van Raemdonck,
who becomes chief executive officer next month, is taking over a
retailer facing heavy losses, an industrywide traffic slowdown and --
worse -- nearly $5 billion in debt.. . . more

Lululemon Athletica Inc. is raising its sales and earnings guidance for its fourth quarter.

The
retailer says it now expects net revenue will be in the range of $905
million to $915 million for the quarter based on a total comparable
sales increase in the high single digits on a constant dollar basis.. . . more

In its early stages, the Republican tax plan didn’t bode well for retailers. Speaker of the House
Paul Ryan
wanted to include a border-adjusted tax on imports that would have been disastrous for an industry that sources much of its merchandise overseas.

That didn’t make it into the final plan. Instead of coal for
Christmas, retailers got a war chest. Their corporate tax rate of 35%
will drop to 21%, handing them a free cash flow boost as they fight for
survival in the Amazon era.. . . more

Kohl's put up strong sales numbers throughout November and December,
joining other traditional department stores in a much needed holiday
rally.

Comparable-store and total sales surged 6.9 percent during
the critical end-of-year shopping period, Kohl's said Monday, providing
more evidence that department stores are learning to better compete
against Amazon.com.. . . more

Though retail real estate has suffered greatly from the massive closures of major brick-and-mortar retailers in the past year, there are still ample investment opportunities in the sector. Tenants, owners and investors could find opportunities in the sector as retailers strategically transform their business models and physical locations to embrace e-commerce and become more experiential.

TH Real Estate said in a 2018 outlook report that there are three ways the retail sector will be transformed this year. The firm called it the three R's of retail: reduce, reuse and recycle. . . . more

Friday, January 5, 2018

A wave of store closings and retailer bankruptcies is coming in early 2018, as the industry deteriorates faster than analysts had expected a year ago, according to Credit Suisse Group AG.

The retail business’s “large and undeniable transformation” will crimp rents and vacancy rates this year, strategists Roger Lehman and Benjamin Rozyn wrote in a note Thursday. Bonds backed by these loans will likely weaken, they added.. . . more

Online retailing is often cast as an outlier
threatening to decimate the traditional brick-and-mortar retail
business. While industry experts no longer fear such a drastic outcome,
omni-channel retailers have been making moves recently that are
difficult to ignore. The U.S. Department of Commerce holds that e-commerce accounts for 9 percent of all retail purchases, according to the agency’s third quarter 2017 data.

That number is expected to grow. Online sales will reach about $100
billion in 2017, predicted Ben Conwell, a senior managing director at
real estate services firm Cushman and Wakefield and its e-commerce
advisory group lead, during a recent webcast about 2017 holiday sales
expectations.. . . more